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A CME Group spokesperson offered the following statement to CNBC:

“Our equity index futures and options markets paused intermittently following this evening’s open due to volatility, which triggered more than 40 Velocity Logic events in the first six minutes of trading. All markets operated as designed throughout.”

Speculation for the swell in volume and plunge in futures included the news of the arrest of the CFO of the Chinese telecom company Huawei. The arrest was made by the Canadian authorities on the extradition request by the U.S., a move that some worried could put trade negotiations between Beijing and Washington at risk.

“After we saw this Huawei news hit, it seemingly (and inordinately) contributed to an almost impossible 65 handle drop in Spooz (S&P futures) on the overnight reopen, with 36,700 contracts trading in the first 10 minutes,” said a note from the Nomura Securities trading desk.

But traders also speculated that the selling could be attributed to a large fund or funds liquidating a position.

“It feels to me that hedge fund redemptions are in full swing and equity investors were too complacent for years,” wrote Tom di Galoma, managing director at Seaport Global Holdings. “They are finding out what reality looks like which means stock prices go up slowly and go down hard.”

Futures briefly recovered but then eventually fell back to near those lows as traders said the damage was already done.

“After the gap lower inevitably hit more US Equities ‘stop loss’ limit orders and further bludgeoned trader sentiment, the modest recovery thereafter lost further steam over the very early US hours,” the Nomura note said.

The CME’s Velocity Logic is designed to detect market movements of a set numbers of ticks up or down in a predetermined amount of time and halt trading if necessary.

The S&P 500 fell 1.7 percent at the opening bell Thursday while the Dow dropped more than 450 points, bringing that index’s two-day losses to more than 1,000 points. The moves may also be linked to pent-up market jitters that accumulated when the major exchanges were closed on Wednesday for the funeral of President George H. W. Bush.

— With reporting by CNBC’s Michael Bloom.

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Oil's recent price surge won't last, economists predict

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Sluggish global growth and an increase in U.S. output both signal the end of the recent rally in oil prices, economic research consultancy Capital Economics has suggested.

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US GDP grows by 3.2% in the first quarter

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The U.S. economy grew at a faster pace than expected in the first quarter and posted its best growth to start a year in six years.

First-quarter GDP expanded by 3.2% in the first quarter, the Bureau of Economic Analysis said in its initial read of the economy for that period. Economists polled by Dow Jones expected the U.S. economy increased by 2.5% in the first quarter. It was the first time since 2013 that first-quarter GDP topped 3%.

Exports rose 3.7% in the first quarter, while imports decreased by 3.7%. Economic growth also got a lift from strong investments in intellectual property products. Those investments expanded by 8.6%.

“The upside beat was helped by net trade (exports jumped while imports contracted sharply) and inventories which combined contributed almost 170 bps of the rise,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Personal spending though, the biggest component was up just 1.2%, two tenths more than expected as an increase in spending on services and nondurable goods offset a decline in spending on durable goods.”

Disposable personal income increased by 3%, while prices increased by 1.3% when excluding food and energy. Overall prices climbed by 0.8% in the first quarter.

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Trump tariff threat on autos could bring a German recession

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A trade war between the United States and Europe is coming and the fallout could tip Germany into recession, according to analysts at German lender Commerzbank.

EU leaders have now agreed to negotiate fresh trade arrangements with Washington but have restricted the talks to industrial goods only. That scope of debate is likely to irk President Donald Trump who is under pressure from Congress to win access to EU agriculture markets.

In February, Trump said he would impose tariffs on cars imported from the European Union if U.S. talks with the bloc can’t produce a new deal. The EU has since threatened to tax 20 billion euros ($22 billion) worth of U.S. goods.

Both sides have cautiously hung on to existing agreements, promising to take no action until talks are concluded.

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